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Summers Urges Fed to Avoid 1970s Error of Easing Amid Recession

  • Former Treasury secretary repeats view that recession likely
  • Summers says coming downturn shouldn’t be as bad as last two
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WATCH: Former Treasury Secretary Lawrence Summers says a US recession is almost inevitable. Source: Bloomberg

Former Treasury Secretary Lawrence Summers said that it will be important for policy makers to allow any coming US recession to do the job of quelling inflation, and to avoid mistakes made in the 1970s, when surging prices became entrenched.

“It’s going to be very important to make sure that, if we’re going to go through a period of pain, we do slay the inflation dragon,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “There have been many failures -- the 1970s are the classic example -- of where economic policy makers did the equivalent of stopping the antibiotic when they felt better but before the 10-day dose was through.”